Wednesday, December 6, 2017

"Hungry for Investment: Big Food Races Toward Startups"

Following up on yesterday's Nestle and Campbell Soup Co. to Leave the Grocery Manufacturer’s Association "The food lobby is splintering as companies disagree about how to respond to changing consumer tastes"

From CB Insights:
Since 2015, global food giants from Tyson Foods to Land O'Lakes have launched venture funds and incubator programs to attract early-stage startups.

Pasta giant Barilla is the latest major food company to launch a venture fund. In November 2017, the company unveiled Blu1877, a new fund which will invest in sustainable pasta and condiment startups.

Since 2015, we’ve seen a domino effect of leading global food companies establishing venture funds and startup incubator programs.These include Campbell’s Soup with Acre Venture Partners($125M fund), Kellogg’s with Eighteen94 Capital ($100M fund), Chobani with its food incubator (provides $25K grants), and AB InBev with ZX Ventures.

We used CB Insights data to create a timeline of major food corporates launching venture funds and incubator programs, and analyzed their early investment and acquisitions activity in the private market.

Food corporates announce startup initiatives
As the timeline below shows, alcohol companies Constellation Brands, AB InBev, and Diageo were slightly ahead of the curve in launching funds. Major CPG companies followed, including General Mills, Campbell’s, Kellogg’s, and Danone.

These funds operate across various structures. Some, such as General Mills’ 301 Inc., are managed internally by the corporation; others, such as Campbell’s Acre Venture Partners, are managed by external investors with the corporation (e.g. Campbell’s) as the sole limited partner (LP).
Business Social Graph: funds begin to invest
Apart from Grupo Bimbo’s Eleva and Barilla’s Blu1877, the funds in this analysis have all backed startups. Some have also strengthened their ties with other investors in the ecosystem; Danone Ventures, for example, poured $15M into NYC-based food VC firm AccelFoods.

In the infographic below, we illustrate the investments and acquisitions of each of these companies and their venture funds/incubator programs....MUCH MORE
Trouble In Packaged Food Land (K; GIS; MDLZ; NESN)
Nine of the World's Biggest Packaged Food Companies Have Launched Venture Capital Units
M&A In European Food